Zero UPI Interchange, PSP Fees may hurt Google Pay,PhonePe

NPCI has agreed to revise the UPI interchange & payment service provider fees to "zero" for all domestic UPI merchant (P2M) transactions with effect from Jan 1 '20, for an interim period until April 30, 2020

This move may hit revenues of digital payments players like PhonePe, Google Pay and Amazon Pay which have spent heavily to grab a greater market share in the UPI ecosystem.

The waiver of the PSP fee would hardly leave any room for Third Party Apps (TPAs) such as Google Pay, PhonePe, Amazon Pay and others to earn anything on UPI transactions, these TPAs on average make about Rs. 0.30 - 0.35 through PSP fee.

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